When you run ads on Amazon, knowing whether your campaigns are profitable is just as important as getting sales. Amazon advertising gives you powerful tools to reach customers, but without the right metrics, it can be hard to tell if your ad spend is producing the results you want. This is where ACoS, or Advertising Cost of Sales, becomes an important measure of performance.

By tracking ACoS, you can see how much you spend on ads compared to the revenue those ads generate. This helps you decide if your campaigns are efficient, where to adjust your budget, and how to improve your overall strategy. For Amazon sellers, understanding and managing ACoS is key to making smarter advertising decisions and keeping your business profitable.

Defining ACoS and Calculation

Understanding ACoS and Its Role in Evaluating Advertising Profitability

Advertising Cost of Sales (ACoS) is a metric that shows how much of your sales revenue goes toward advertising costs. You calculate it by dividing your ad spend by the sales generated from that spend. The result is expressed as a percentage.

This percentage is important because it helps you see whether your campaigns are profitable. A lower ACoS means you are spending less on ads for each dollar of revenue, while a higher ACoS suggests your advertising costs are eating into your earnings.

By tracking ACoS, you can:

• Identify strong and weak campaigns: See which ads, keywords, or placements are worth keeping.
• Set realistic budgets: Know how much you need to spend to reach your sales goals.
• Measure progress over time: Compare your ACoS month by month to see if your campaigns are improving.

Monitoring ACoS helps you avoid overspending while keeping your campaigns aligned with profit goals.

Steps to Calculate Amazon ACoS with Ad Spend and Sales Data

To compute ACoS, you only need two numbers:

1. Ad Spend – the total amount you paid for advertising.
2. Ad Revenue – the sales generated directly from those ads.

The formula is:

ACoS = (Ad Spend ÷ Ad Revenue) × 100

For example:

Ad Spend	Ad Revenue	ACoS Result
$100	$200	50%
$300	$1200	25%
$500	$400	125%

• A 50% ACoS means you spent $0.50 for every $1 of sales.
• A 25% ACoS means you spent $0.25 for every $1 of sales.
• A 125% ACoS means you spent more than you earned, which points to a loss.

You want to aim for an ACoS that fits your business goals. A very low ACoS shows efficiency but may limit growth if you are not investing enough in ads. A higher ACoS may be acceptable if your goal is to increase visibility or launch a new product.

Keeping track of this calculation helps you adjust bids, budgets, and targeting strategies to improve results.

How ACoS Connects to Sales and Profit Margins

Your ACoS directly affects your profit margins. Since it measures how much you spend on ads compared to what you earn, it helps you see how much profit remains after advertising costs.

If your ACoS is too high, your profit margin shrinks. For example, if your product margin is 40% and your ACoS is 35%, you keep only 5% profit after advertising. If your ACoS rises above your profit margin, you may even lose money on each sale.

Here’s a simplified view:

Product Margin	ACoS	Profit After Ads
40%	20%	20%
40%	35%	5%
40%	45%	-5% (loss)

To keep your ACoS within a healthy range, you need to optimize your campaigns to drive more conversions at lower costs. Some methods include:

• Targeting high-converting keywords to attract buyers who are ready to purchase.
• Improving product listings with clear descriptions, strong images, and competitive pricing.
• Testing bidding strategies to find the balance between visibility and cost control.

By aligning your ACoS with your profit margins, you can maintain healthy sales growth without sacrificing profitability.

Regular monitoring is essential. Using tools such as an Amazon ACoS calculator or campaign reports allows you to track changes and make quick adjustments. This ongoing process helps you balance ad spend, sales performance, and overall profit.

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Interpreting ACoS Metrics

Reviewing ACoS Against Goals and Market Standards

You should always compare your Advertising Cost of Sales (ACoS) with both your campaign goals and relevant industry averages. ACoS benchmarks vary by product type, competition level, and seasonality, so a “good ACoS” for one category may not be realistic in another.

If your ACoS is higher than the average for your industry, it may signal that your ads are less efficient compared to competitors. A lower-than-average ACoS can mean your campaigns are performing well, but it could also suggest you are not investing enough in ads to maximize growth.

Your campaign goals will determine what level of ACoS is acceptable. For example:

• Sales Growth Focus: You may accept a higher ACoS if your aim is to drive more orders and increase market share.
• Profit Margin Focus: You will need a lower ACoS to ensure your ad spend does not cut too deeply into your profits.

A simple table can help clarify how goals and benchmarks align:

Campaign Goal	Acceptable ACoS Range	Notes
Increase sales volume	Higher than average	Short-term growth may justify higher costs.
Improve profitability	Lower than average	Focus on efficiency and tighter cost control.
Brand awareness	Flexible	ACoS may be higher since the goal is visibility, not immediate profit.

By checking your ACoS against both your internal goals and external benchmarks, you can measure whether your campaigns are on track or need adjustments.

Distinguishing Between Breakeven and Sustainable ACoS

Breakeven ACoS is the point where your ad spend equals the revenue generated from those ads. At this level, you are not losing money on ads, but you are not making a profit either. This calculation does not include other costs such as shipping, storage, or overhead.

Sustainable ACoS goes beyond breakeven. It accounts for all business expenses and ensures you still earn profit after covering ad costs. This is the level you should target if you want long-term stability.

Key differences:

Type of ACoS	Definition	Practical Use Case
Breakeven ACoS	Ad spend = Ad revenue (ignores other costs)	Useful for understanding the minimum limit.
Sustainable ACoS	Ad spend allows profit after factoring in all costs (inventory, fees, etc.)	Best for long-term growth and profitability.

To aim for sustainable ACoS, you need to:

1. Continuously monitor campaign performance.
2. Optimize targeting and keywords to lower wasted spend.
3. Balance bids to avoid overspending while still reaching buyers.

A breakeven ACoS may look attractive at first, but it does not guarantee a healthy business. Striving for sustainable ACoS ensures you can cover costs, remain profitable, and scale effectively.

Examining ACoS Patterns and Spotting Weak Points

Looking at ACoS as a single number provides limited insight. Instead, you should track how it changes over time. Trends reveal whether campaigns are improving, stable, or losing efficiency.

To evaluate ACoS trends:

• Compare with past results: Look at your ACoS month over month or quarter over quarter. Identify whether it is trending up, down, or fluctuating.
• Check for performance spikes: Sudden increases may indicate poor targeting, rising competition, or seasonal changes.
• Look for steady declines: A falling ACoS often signals improved efficiency, which may justify scaling up those campaigns.

Other factors to consider include:

• Conversion Rate (CVR): A high conversion rate paired with a moderate ACoS usually points to strong targeting.
• Click-Through Rate (CTR): Low CTR may suggest your ads are not appealing or relevant.
• Seasonality: During peak shopping seasons, ACoS may rise due to stronger competition.

Here is an example of how to track trends:

Month	ACoS %	Conversion Rate %	Notes
January	35%	9%	Post-holiday dip, higher ad costs.
February	28%	11%	Improved targeting lowered ACoS.
March	24%	13%	Stronger results, time to scale.

You can also test different ad strategies when ACoS trends upward. For example, add negative keywords to filter irrelevant clicks or adjust bids to focus on higher-converting terms. By doing so, you can identify weak points and take action before costs spiral.

Applying ACoS Insights to Guide Ad Strategies

ACoS data is more than just a percentage. When used correctly, it helps you decide where to allocate budget and which campaigns to prioritize.

If a campaign’s ACoS is higher than your profit margin, you are losing money on each sale. In this case, you should either optimize the campaign or reduce spend. If a campaign’s ACoS is below your profit margin, it is profitable, and you may want to scale it further.

Steps to use ACoS data effectively:

1. Calculate regularly: Use an ACoS calculator or reporting tool to track results at least weekly.
2. Compare against profit margins: Always know your breakeven and sustainable ACoS levels.
3. Adjust bids and keywords: Increase bids on profitable keywords and reduce or pause poor performers.
4. Reallocate budget: Shift spend from campaigns with high ACoS to those with proven profitability.

A simple decision framework can help:

• ACoS < Sustainable ACoS: Expand campaign or increase bids.
• ACoS = Sustainable ACoS: Maintain current spend, monitor closely.
• ACoS > Sustainable ACoS: Reduce bids, refine targeting, or pause.

Using ACoS data in this structured way ensures you are not guessing with your ad dollars. Instead, you make informed choices that keep your campaigns aligned with both short-term goals and long-term profitability.

Factors That Influence ACoS

Bidding Strategy and Keyword Choices

Your bid levels and keyword targeting directly shape how your Amazon PPC campaigns perform. When you raise your bids, your sponsored products ads may appear in stronger placements, but higher bids also increase your cost per click (CPC). If clicks do not convert into sales, your advertising cost of sales (ACoS) will climb quickly.

You should also pay close attention to keyword selection. Targeting keywords with high conversion rates can bring in qualified traffic and improve your return on ad spend. However, these keywords often come with higher competition and higher CPC, which can reduce profit margins if not managed carefully.

Using negative keywords is another important tactic. By excluding irrelevant search terms, you prevent wasted clicks that drain your budget without generating sales. This helps you focus spend on terms that are more likely to convert.

A quick example of how bid and keyword choices affect ACoS:

Action	Impact on ACoS
Increase bids	Higher visibility, higher spend
Target high-converting keywords	More sales, but higher CPC
Add negative keywords	Less wasted spend, lower ACoS

Balancing bids, keyword targeting, and exclusions helps you control both visibility and profitability.

Pricing and Profitability

Your product price and profit margin play a central role in how sustainable your ACoS is. Since ACoS is calculated as ad spend ÷ ad sales, the revenue from each sale must be high enough to cover both advertising costs and Amazon fees.

If your product price is low, even small ad costs can eat into your profit margin. For example, selling a $10 product with a $3 profit margin leaves little room for ad spend. On the other hand, if your price is set too high, you may struggle to generate enough conversions to make your ads worthwhile.

To manage this balance, you should:

• Calculate your break-even ACoS (the point where ad spend equals profit margin).
• Set a target ACoS that leaves room for profit after ads and Amazon fees.
• Adjust pricing if needed to stay competitive while protecting margins.

A simplified view of how pricing interacts with ACoS:

Product Price	Profit Margin	Effect on ACoS
Too low	Small margin	Hard to achieve low ACoS
Balanced	Sustainable margin	Easier to maintain healthy ACoS
Too high	Reduced sales	Higher ACoS due to fewer conversions

Monitoring both your pricing and your ACoS ensures that your advertising spend contributes to long-term profitability.

Listing Quality and Keyword Relevance

Your product listings strongly influence conversion rate, which directly affects ACoS. When your listings are clear, relevant, and optimized, shoppers are more likely to buy after clicking on your ad. This lowers wasted spend and improves your advertising efficiency.

To improve listing performance, focus on:

• Titles: Keep them concise, include important keywords, and make them easy to read.
• Descriptions and bullet points: Highlight the benefits and features that matter most to buyers.
• Images: Use high-quality photos that show the product clearly and from multiple angles.

Keyword relevance also plays a role. If your ads target keywords that match your product well, your click-through rate (CTR) and conversion rate both improve. This leads to more organic sales over time, which can reduce the need for heavy ad spend.

A well-optimized listing not only helps your sponsored brands or sponsored products ads perform better but also boosts your organic ranking. This creates a cycle where ads drive visibility, and improved listings capture more sales at a lower ACoS.

Market Competition

Competition on Amazon has a direct impact on your advertising costs and results. When multiple sellers bid on the same keywords, CPC rises. If competitors have larger ad budgets, they may secure stronger placements, making it harder for your ads to gain clicks without overspending.

Competitors also influence ACoS through pricing. If they offer similar products at lower prices, shoppers may choose them even after clicking your ad. This increases your ad spend while lowering your conversion rate, driving up your ACoS.

To manage competition effectively, you should:

1. Track competitor pricing and adjust your own when necessary.
2. Monitor which keywords competitors are targeting.
3. Differentiate your product through reviews, images, or added value.

A simple breakdown of how competition influences ACoS:

Competitor Action	Effect on Your Campaign
Higher keyword bids	Raises CPC, increases ACoS
Lower product price	Reduces your conversion rate
Stronger listings	Makes your ads less effective

By staying aware of competitor behavior and making adjustments, you can reduce wasted spend and keep your ACoS at a manageable level.

Strategies for Optimizing ACoS

Ongoing Keyword Discovery and Refinement

Your keywords play a direct role in how well your ads perform and how much you spend per click. By keeping your keyword list updated, you can increase visibility while reducing wasted ad spend.

A structured approach helps you stay consistent:

1. Spot high-value search terms – Use Amazon’s search bar, auto-suggestions, and related searches to uncover terms that shoppers actively use.
2. Check competitor listings – Study product titles, bullet points, and descriptions to see which keywords competitors rely on. Tools like Helium 10 or Jungle Scout can speed up this process.
3. Update product pages – Place strong keywords in your product title, bullet points, and description so your ads and listings align with shopper searches.
4. Track and revise – Monitor keyword performance in Amazon’s Advertising Console. Increase bids on terms that convert well and lower or pause those that drain budget without sales.

You can also compare keyword performance in a simple table to decide where to focus:

Keyword Type	Conversion Rate	CPC Trend	Action Needed
High-performing	Strong	Stable	Increase bid
Low-performing	Weak	Rising	Reduce or pause bid
Moderate	Average	Stable	Monitor and adjust

By treating keyword optimization as an ongoing task, you can maintain steady improvements in both ad visibility and ACoS.

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Fine-Tune Bids and Budget Distribution

Your ACoS depends heavily on how you set bids and allocate your ad budget. Spending too much on underperforming terms drives costs up, while ignoring high-return keywords limits sales.

To manage this balance, review performance data often. Look at which keywords and products generate the most sales at a reasonable cost. Then adjust your bids and budgets accordingly:

• Raise bids on keywords that bring profitable sales.
• Lower bids on terms that get clicks but few conversions.
• Shift budget toward campaigns with strong returns and reduce spend on weaker ones.

You can also test different bid strategies, such as dynamic bidding, to let Amazon adjust your CPC in real time. This can help you capture more sales without overspending.

A sample adjustment framework:

Performance Level	Bid Adjustment	Budget Allocation
High ROI	Increase	Increase
Low ROI	Decrease	Decrease
Break-even	Maintain	Monitor closely

By making steady adjustments, you improve CPC optimization and keep your ACoS at a level that supports profitability.

Improve Targeting and Split Campaigns

Targeting the right products and audiences helps you control costs and direct your budget where it matters most. Instead of running broad campaigns, break them into smaller, focused groups.

Ways to refine targeting:

• Highlight products with higher margins and give them more budget.
• Reduce spend on items with weak sales or high ACoS.
• Use negative keywords to filter out irrelevant traffic.

Ways to segment campaigns:

• Group products by margin or category.
• Separate branded and non-branded keywords.
• Create campaigns for specific audience types, such as repeat customers.

This structure allows you to apply different bids and budgets to each segment. For example, you can run a dedicated campaign for premium products with higher bids while keeping a separate campaign for lower-margin items with tighter controls.

Breaking down campaigns this way gives you better control over performance and helps reduce ACoS by focusing spend where it matters most.

Apply Negative Keywords to Cut Wasted Spend

Negative keywords are an essential tool for controlling costs. They prevent your ads from showing up for searches that don’t match your product, which reduces irrelevant clicks and wasted ad spend.

To use them effectively:

1. Review search term reports to see which queries trigger your ads but fail to convert.
2. Build a list of exclusions by adding words or phrases that don’t apply to your product.
3. Apply at campaign or ad group level so your ads skip irrelevant searches.
4. Update regularly to keep filtering out low-quality traffic.

For example, if you sell premium leather wallets, you may want to add “cheap,” “free,” or “DIY” as negative keywords. This ensures your ads don’t appear for bargain hunters unlikely to buy your product.

A simple checklist for managing negative keywords:

• Review search term data weekly
• Add irrelevant terms to exclusion list
• Test impact on click-through rate and conversions
• Reassess every month for new patterns

By using negative keywords consistently, you not only cut wasted clicks but also improve conversion rates. This lowers your ACoS and makes your ad spend more efficient.

Tracking and Analyzing Amazon ACoS Performance

Review ACoS at the Campaign and Keyword Level

You need to measure ACoS at both the campaign and keyword level to understand where your ad spend is driving results. Campaign-level ACoS shows you how profitable an entire Amazon PPC campaign is, while keyword-level ACoS highlights which search terms are generating sales and which ones are wasting budget.

Key metrics to track include:

• Campaign ACoS: Total ad spend ÷ total sales from the campaign.
• Keyword ACoS: Ad spend for a keyword ÷ sales from that keyword.
• Conversion Rate (CVR): Percentage of clicks that lead to a purchase.
• Click-Through Rate (CTR): Percentage of impressions that result in clicks.

By comparing these numbers, you can see which campaigns or keywords are worth scaling and which ones should be paused or adjusted. For example, if a keyword shows a high ACoS with a low conversion rate, it may not be worth continued investment.

Metric	What It Measures	Why It Matters
Campaign ACoS	Profitability of the entire campaign	Helps you decide if the campaign is sustainable
Keyword ACoS	Profitability of individual keywords	Identifies strong vs. weak keywords
Conversion Rate	Sales ÷ Clicks	Shows how well ads convert traffic
Click-Through Rate	Clicks ÷ Impressions	Indicates ad relevance and engagement

Tracking these values regularly keeps you from overspending and helps you focus on keywords and campaigns that deliver higher return on ad spend (ROAS).

Use Amazon Reports and Third-Party Tools

Amazon provides detailed reports that allow you to break down performance. Sponsored Products Reports, Search Term Reports, and Placement Reports give you data on impressions, clicks, spend, and sales. These reports help you see which placements and keywords generate the most ad revenue and which ones underperform.

Third-party platforms such as Helium 10, Jungle Scout, or Sellics provide deeper insights. These tools often include:

• Keyword research to uncover profitable search terms.
• Competitor analysis to see how your rivals allocate ad spend.
• Product tracking to monitor performance trends over time.

By combining Amazon’s native reports with external analytics, you get a clearer picture of your total ACoS (TACoS) and Amazon ROAS. This dual approach helps you refine bids, adjust targeting, and identify areas where you can reduce wasted spend.

Compare ACoS with Other Key Metrics

Looking at ACoS alone does not always give you the full story. You should evaluate it alongside metrics such as CTR, CVR, TACoS, and ROAS.

• A high ACoS with strong CTR and CVR may still be acceptable if you are driving high sales volume and gaining market share.
• A high ACoS with weak CTR and CVR signals that your ads are not resonating with shoppers, which may require changes to targeting, ad copy, or product listings.
• TACoS (Total Advertising Cost of Sale) provides a broader view by comparing ad spend against total revenue, not just attributed ad sales.

Here’s a simple way to view the relationship:

Scenario	ACoS	CTR	CVR	Action
High ACoS + High CTR + High CVR	High	High	High	Acceptable if sales volume justifies cost
High ACoS + Low CTR + Low CVR	High	Low	Low	Rework targeting, keywords, and ad copy
Low ACoS + High CVR	Low	Varies	High	Scale up spend to capture more sales
Low ACoS + Low CVR	Low	Varies	Low	Review product listing and relevance

By comparing ACoS with these other metrics, you can make more balanced decisions that improve both profitability and ad efficiency.

Define ACoS Targets and Measure Progress

Setting clear ACoS goals allows you to align your advertising with your business objectives. Your target Amazon ACoS should reflect your profit margins, budget, and growth strategy.

• If your priority is profitability, aim for a lower ACoS that ensures each sale contributes to your bottom line.
• If your goal is market share growth, you may accept a higher ACoS in the short term to capture more visibility and traffic.

Once you establish your target, track progress consistently. Create a simple tracking sheet or dashboard that records:

• Current ACoS vs. Target ACoS
• ROAS trends over time
• TACoS compared to total revenue
• Changes in conversion rate and CTR

Example tracking table:

Date	Target ACoS	Actual ACoS	ROAS	TACoS	Notes
Week 1	25%	28%	3.2x	14%	High spend on broad keywords
Week 2	25%	24%	3.8x	12%	Adjusted bids, improved efficiency
Week 3	25%	22%	4.1x	11%	Paused low-performing keywords

Tracking progress this way helps you see whether changes to your Amazon advertising campaigns are moving you closer to your goals. Over time, you can refine your strategy to balance profitability and growth, while keeping ad revenue and return on ad spend (ROAS) in line with expectations.

Balancing ACoS with Business Goals

Match ACoS Targets to Core Business Priorities

Your target ACoS should always connect directly to your main business objectives. If your goal is to maximize profit margins, you will likely aim for a lower ACoS. If your focus is growth and brand awareness, you may accept a higher ACoS to gain visibility and sales momentum.

Key factors to consider:

• Profit margin limits: Never allow your ACoS to be higher than your profit margin. For example, if your margin is 25%, keeping your ACoS under that threshold ensures you are not losing money.
• Budget control: Set clear advertising budgets and align your ACoS goals with those limits. This prevents overspending and helps you allocate funds effectively.
• Business stage: A new product launch may justify a higher ACoS to build traction, while a mature product might require tighter cost control.
• Regular monitoring: Track your ACoS data often. Adjust bids, keywords, or campaign types when you see performance moving away from your goals.

A simple way to compare your goals with your target ACoS is through a table:

Business Objective	Typical Target ACoS Range	Focus Area
Aggressive growth	30% or higher	Visibility, sales volume
Balanced profitability	15–25%	Steady sales with controlled spend
Strict cost control	Below 15%	Profit retention, efficiency

This approach ensures your campaigns stay aligned with both short-term needs and long-term direction.

Weigh Long-Term Gains and Customer Value

Short-term ACoS improvements may look good on paper, but they don’t always reflect the bigger picture. You need to think about customer lifetime value (CLV) when setting ACoS goals.

If your average customer buys from you multiple times, it can make sense to spend more upfront to acquire them. For instance:

• If a customer’s first purchase generates $10 profit but their lifetime value is $100, you can afford to run a higher ACoS campaign to win that customer.
• If most buyers are one-time purchasers, then your ACoS should remain lower to protect profitability.

Practical steps:

1. Calculate average CLV by looking at repeat purchases, cross-sells, and upsells.
2. Decide acceptable acquisition cost based on CLV. This helps you set a realistic target ACoS.
3. Use campaign data to identify which ads bring in customers who return for more purchases.

By connecting ACoS goals with CLV, you avoid focusing only on immediate returns and instead build a sustainable growth model.

Balance Advertising Costs with Market Exposure

Finding the right balance between ACoS and visibility is critical. Spending too little on ads may protect your margins but limit your reach. Spending too much may drive traffic but reduce profit.

To manage this balance, consider:

• Target ACoS by product type: High-margin products can handle higher ACoS, while low-margin products require tighter control.
• Ongoing optimization: Adjust bids, keywords, and placements regularly to maintain efficiency.
• Product listing quality: Strong titles, bullet points, and images improve conversions, lowering your effective ACoS.
• Organic ranking: Ads can help boost organic visibility. Over time, stronger organic placement may allow you to reduce ad spend.

A simple checklist can help you review your balance:

• Is my ad spend generating profitable sales?
• Are my products ranking higher in organic search?
• Am I gaining enough visibility to stay competitive?
• Does my current ACoS align with my goals for growth or profit?

The right balance may require ongoing testing, but consistent adjustments ensure you don’t sacrifice either profitability or exposure.

Use Automation to Optimize Campaigns

Managing campaigns manually can be time-consuming and less efficient. Automation tools help you control ACoS by adjusting bids, targeting, and budgets using real-time data.

Benefits of automation include:

• Bid adjustments: Tools can increase or decrease bids automatically to keep you within your target ACoS.
• Keyword management: Automation can identify high-performing keywords and add negative keywords to reduce wasted spend.
• Budget allocation: Funds can shift toward campaigns with better returns, improving overall efficiency.
• Time savings: Automation reduces manual work, freeing you to focus on product development and customer service.

Example of how automation supports ACoS goals:

Task Automated	Impact on ACoS
Dynamic bid changes	Keeps spend in line with targets
Keyword optimization	Improves relevance and conversion
Budget reallocation	Directs funds to profitable ads
Negative keywords	Cuts wasted spend on poor traffic

To get the most out of automation:

• Choose a tool that fits your business size and budget.
• Set clear rules for target ACoS and campaign goals.
• Review performance reports regularly to confirm the tool is delivering the expected results.

When used correctly, automation helps you maintain control over ACoS while scaling your advertising efforts more efficiently.

Amazon DSP for Smarter ACoS Control

Amazon DSP gives you the ability to manage advertising with greater precision by using programmatic technology. You can place ads across Amazon-owned sites as well as third-party platforms, giving you wider reach. Through real-time bidding, your ads appear in front of the right audience at the right moment, which helps reduce wasted spend.

You can refine targeting based on shopping behavior, demographics, and interests. This lets you focus on shoppers who are more likely to purchase, which can lower your Advertising Cost of Sales (ACoS). Retargeting is another useful feature. It allows you to reconnect with people who viewed your product but did not buy, giving you a second chance to convert them.

Amazon DSP also provides detailed performance tracking. You can review data such as:

Metric	What It Shows	Why It Matters
Impressions	How often ads are displayed	Measures reach
Clicks	Number of ad interactions	Indicates engagement
Conversions	Purchases made after clicking	Tracks sales impact
Cost per Click (CPC)	Average cost for each click	Helps manage spend efficiency

With these insights, you can adjust bids, placements, and audiences to keep ACoS under control. By making changes based on real data, you improve efficiency and strengthen your return on investment.

Closing Thoughts

You can strengthen your Amazon advertising by treating ACoS as both a measure of sales growth and a guide to profitability. Instead of relying on one fixed approach, test different bidding strategies, keyword adjustments, and ad placements to see what works best for your products.

Consider using tools like Amazon DSP for more advanced campaign control. Keep in mind that steady adjustments and consistent monitoring often deliver better results than quick fixes.

• Test new strategies regularly
• Track performance changes closely
• Refine campaigns based on data

With persistence, you can reach a more efficient ACoS and improve long-term results.

Frequently Asked Questions

What is considered a good ACOS for Amazon sellers?

A “good” ACOS depends on your product margins and business goals. In general:

• Low ACOS (e.g., under 20%) means you spend less on ads and keep more profit.
• Moderate ACOS (20–40%) may work if you focus on growth or gaining visibility.
• High ACOS (above 40%) can still be useful if your goal is brand awareness or launching a new product.

You should compare your ACOS to your break-even point, which is the maximum ACOS you can afford before losing money.

How do you calculate ACOS for Amazon campaigns?

The formula for ACOS is simple:

ACOS = (Ad Spend ÷ Ad Sales) × 100

Example:

• If you spend $100 on ads and make $200 in sales,
• Your ACOS = (100 ÷ 200) × 100 = 50%

This tells you how much of your sales revenue goes back into advertising.

How does ACOS differ from ROAS in Amazon advertising?

Both ACOS and ROAS measure ad efficiency, but they express it differently:

Metric	Formula	Higher or Lower is Better?
ACOS	(Ad Spend ÷ Ad Sales) × 100	Lower is better
ROAS	Ad Sales ÷ Ad Spend	Higher is better

They are inverse metrics. For example, an ACOS of 25% equals a ROAS of 4.

What does ACOS mean in Amazon advertising?

ACOS stands for Advertising Cost of Sales. It shows the percentage of your revenue that comes from ad spend. This metric helps you see how efficiently your ads generate sales.

How is TACOS different from ACOS on Amazon?

• ACOS only looks at sales that come directly from ads.
• TACOS (Total Advertising Cost of Sales) compares ad spend to all sales, both paid and organic.

TACOS gives you a broader picture of how ads influence your overall business, not just your paid results.

How does ACOS affect your profitability on Amazon?

ACOS directly impacts your profit margins.

• High ACOS → More of your revenue goes into ads, leaving less profit.
• Low ACOS → You keep more profit from each sale.

If your ACOS is higher than your break-even point, you may lose money on each sale. If it’s lower, your ads are profitable.